Last year, new vehicle sales topped $1 trillion across all franchised dealerships. That amount represents 17.14 million vehicles of varying types. During only the first half of 2017, the US leased 2.1 million cars. But which option is better? While buying outpaces leases by a lot, the latter still represents a significant part of the automobile industry. It might seem like a lease the best option since the per month rates are lower than the monthly rates for a loan-based purchase. However, looking into the long-term price of these decisions is vital in deciding which option is best for you.
Buying is typically less expensive than leasing when everything is said and done. The affordable monthly lease payments on commercials are usually for low-mileage leases. This fact means they are below the average amount of mileage someone drives per year. Mileage caps limit how many miles you can drive each year as part of the contract. Should that limit be exceeded, the financial penalty can be expensive.
Many leases need a substantial down payment, likely between $1,000 and $3,000. Then there are the monthly payments to contend with. When the contract is up, usually around 36 months, you have a choice. Either you can pay a substantial fee to cover the rest of the vehicle cost all at once, or you could surrender the vehicle and either lease or buy a new car. The primary issue with leasing is the monthly payments never end.
When you buy a car, it’s yours. You don’t have to work with mileage caps and can keep your car after making the payments. The majority of vehicles should last much longer than the time loans take to pay off.
Should You Ever Lease?
Some cases do call for leasing rather than buying. If you want a change in cars every couple years, then rental is your best bet. If you go with this approach, you’ll always have access to the latest tech which can be a tremendous asset.
It’s also important to note that most cars leased are under warranty for the duration of the lease. This aspect can help with a sense of peace should anything happen.
There are a lot of leases that include routine maintenance. The monthly payments cover all the basic car needs.
Tips for Negotiating Buying or Leasing
Negotiations can be stressful or overwhelming. For those nervous or inexperienced, bring along a friend or family member who knows more about the process. They can give you advice but also help as an objective third-party. They can help keep your best interests in mind but won’t be emotionally attached to a vehicle or let their feelings impact their decisions.
It’s also important to take your time. Don’t fall to the pressure of the salesperson in making you stick to a decision off the bat. Don’t agree to anything formally on the first day of looking and take some time to sleep on the information while away from the salesperson.
Even though waiting could mean you miss out on a vehicle, there are many automobiles around. Finding a similar car for sale is usually easy.
And of course, always read the contract, whether you’re leasing or buying. If you have questions, don’t hesitate to voice them. You could even negotiate certain fees as well.
Obtaining a car either through purchasing or leasing is a big decision, so it’s important to consider the ups and downs of each option before making your choice.